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The Hydrogen Stream: Rolls Royce, rising prices, and hydrogen fueled beer

This week sees hydrogen pricing hit new highs, driven by simultaneous jumps in the price of natural gas and electricity. Elsewhere, project plans include green hydrogen production at a UK brewery and Ineos building a 100 MW electrolyzer in Germany, machinery manufacturers Rolls Royce and JCB making plans for hydrogen engines, and new investment agreements signed in Belgium, Sweden and Kazakhstan.

After the recent renewed focus on methane leaks, the scientific community is now exploring and researching hydrogen leaks. A group of researchers at the Oslo-Base Center for International Climate Research (Cicero) wrote this month that more research on the topic is needed. “Hydrogen gas emissions to the atmosphere can very likely cause global warming through indirect effects. It can also possibly cause depletion of the ozone layer, and impact air pollution. These adverse effects are likely smaller than those of the fossil fuel usage hydrogen fuel would replace, however, it underlines the importance of keeping hydrogen leakage as low as possible,” the team led by Maria Sand wrote in their summary.

Hydrogen production costs constantly increased in the second quarter of the year, and the trend is continuing into the third and fourth, the European Commission wrote in its quarterly report on European gas markets published last week. The growth is due to the simultaneous jump in gas and electricity prices. “Cost-base assessment price for alkaline technologies rose from € 103/MWh in April to € 138/MWh in June (and to € 179/MWh in August, with CAPEX costs), whereas prices of PEM fuel cell technology based generation rose from € 132/MWh in April to € 172/MWh in June (and to €220/MWh in August). These cost assessments were about twice as high as wholesale electricity prices. At the same time, SMR technology-based cost assessments rose from € 36/MWh in April to € 51/MWh in June, and to € 76/MWh in August, being also almost twice the wholesale natural gas price in each month. It seems that alkaline electrolyzer and PEM technologies, through higher wholesale electricity prices, were impacted by both increasing carbon prices and rising gas prices, as the latter is the most common price setter on wholesale electricity markets,” reads the analysis on the second quarter of the year. The report on the previous quarter did not speak about hydrogen prices, rather focusing on all the aspects of hydrogen from a conceptual perspective. The newly released document is more practical.

Budweiser Brewing Group UK&I, the UK arm of global brewer Anheuser-Busch InBev, and Protium, the UK-based green hydrogen energy company, have teamed up to explore the deployment of zero-emission green hydrogen at Magor brewery in South Wales, one of the largest breweries in the UK. “The project would build the first large-scale hydrogen generation system at a brewery. The hydrogen will fuel the brewery’s production, as well as its key logistics assets including Heavy Goods Vehicles (HGVs) and forklift trucks. The use of green hydrogen technology will help to provide zero carbon power and fuel for all its operations, an important step for the brewery to become carbon neutral,” Protium wrote on Tuesday.

UK manufacturer of construction machinery JCB is investing GBP 100 million (€118.2 million) on a project to increase the efficiency of its hydrogen engines, the company announced on Tuesday. JCB produces engines in Derbyshire, UK and Delhi, India, since 2004. “A team of 100 engineers is already working on the exciting development with the recruitment of up to 50 more engineers under way as JCB targets the end of 2022 for the first machines to be available for sale to customers,” reads the announcement. In the same press release, British Prime Minister Boris Johnson said that UK’s hydrogen economy is “an exciting area that will be essential to tackling climate change, creating new jobs and attracting investment.”

British automobile maker Rolls-Royce said that in the next couple of years some of its engines will solely run on hydrogen. “Already today, gensets powered by mtu Series 500 and Series 4000 gas engines can be operated with a gas blending of 10 percent hydrogen. Beginning in 2022, operation with a hydrogen content of 25 percent will be possible,” the company wrote Friday last week. Rolls-Royce said that natural gas will be the primary fuel in the development of the hydrogen ecosystem. “After intensive tests on test benches and pilot installations at customers in 2022, Rolls-Royce will continuously market new mtu Series 500 and Series 4000 gas engines beginning in 2023 for use with up to 100 percent hydrogen, and on a design to order basis conversion kits to allow already installed gas engines in the field to run on 100% hydrogen,” said Perry Kuiper, President Sustainable Power Solutions at Rolls-Royce Power Systems. Rolls-Royce Power Systems is headquartered in Friedrichshafen in southern Germany.

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British multinational chemicals company Ineos through its subsidiary Inovyn have announced plans to build a 100 MW electrolyzer at its Cologne site in Germany, part of its 2bn investment in Green Hydrogen announced on Monday. The project, which has passed the first selection phase of the Important Projects of Common European Interest process, will have three steps. Firstly, Ineos will produce green hydrogen to be used in the production of green ammonia. Secondly, it will look to develop E-Fuels through Power-to-Methanol applications. Thirdly, Ineos will sell hydrogen to users in the region. “To realize this investment, government support and a suitable regulatory framework is needed,” the company wrote on Tuesday. Earlier this week, the company announced a €2bn investment, calling it Europe’s largest ever investment in hydrogen-related electrolysis projects. “The first plants will be built in Norway, Germany and Belgium in the next 10 years with investment also planned in the UK and France,” reads the announcement made on Monday. The first unit to be built will be a 20 MW electrolyzer to produce clean hydrogen through the electrolysis of water, powered by zero-carbon electricity in Norway.

The European Investment Bank (EIB) and the Flemish government signed a Memorandum of Understanding on hydrogen. “The agreement will help to identify projects that could receive EIB financing and support their bankability,” the EIB wrote on Monday. “Flanders has enormous ambitions in the field of sustainable hydrogen, from the production of green hydrogen to the implementation of that hydrogen for sustainable steel or fuels, as far as development of cheaper hydrogen production plants,” said Flemish Minister of Innovation Hilde Crevits.

Italo-German hydrogen specialist Enapter has won the Earthshot Prize, established by Prince William and the British Royal Foundation, in the category Fix our Climate. “The GBP 1 million [€1.18 million] in prize money will be used in a pivotal part of the Enapter Campus mass production facility and to invest further in research and development,” the company wrote on Tuesday. Earlier this year, Enapter launched the construction of the Enapter Campus, a site in Germany where, starting from 2023, it plans to make 10,000 electrolyzers per month. The Earthshot Prize is a prize awarded annually from 2021 to 2030, to five winners each year whose solutions substantially help the environment.

Sweden-headquartered Svevind and a delegation of the government of Kazakhstan signed a roadmap, outlining the next steps to develop and build green hydrogen projects in the Central Asian country. “The green hydrogen facilities will lift Kazakhstan among the global leaders of renewable energy and green hydrogen. We are very excited to take this next step in the project development, and we are thankful for the outstanding support of the Kazakh government,” said Svevind’s CEO Wolfgang Kropp. Svevind is a privately owned group of companies in the renewable energy industry, based in Weißenbrunn (Germany), Piteå (Northern Sweden), Dresden (Germany), and Almaty (Kazakhstan). “We believe in the prospects of the extra large scale of the 30 GW electrolysis projects in our endless steppes. Currently, we have the understanding and the availability of all the needed resources such as wind, solar, water, land and the know-how from Svevind,” commented in the press release Almas Aidarov, Kazakhstan’s deputy minister for foreign affairs.

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Source: pv magazine